The Difference between Wear and Tear vs Accidental Damage

So your tenants have moved out and you’ve done the final inspection on the property. You’ve compared the state of the property to the official condition report, and guess what – your property doesn’t look as good as it did when the tenants moved in.

Fair wear and tear

Below are some common occurrences of wear and tear that landlords are responsible for and not covered by insurance:

• Faded curtains or frayed cords
• Furniture indentations and traffic marks on the carpet
• Scuffed up wooden floors
• Faded, chipped or cracked paint
• Worn kitchen benchtop
• Loose hinges or handles on doors or windows and worn sliding tracks
• Cracks in the walls from movement
• Water stain on carpet from rain through leaking roof or bad plumbing
• Worn paint near light switches

Proving Fair Wear and Tear

Thorough rental condition reports – complete with detailed photos and potentially even videos – are very useful for avoiding or settling disputes over fair wear and tear. It’s in the best interests of both tenants and landlords to ensure that these reports are complete and signed. With a bit of care, consideration and proper documentation, the outcome of a loss is predictable.

How to Avoid Disputes

One of the best ways to avoid disputes is to ensure your property manager or yourself carries out periodic inspections of your investment property to ensure it is being well cared for and any routine repairs are being made. Each state or territory has different allowances around the number of inspections per year.

These inspections should address the following:

• The lease terms are being honoured
• The property is being maintained in a clean and tidy condition
• The grounds are being maintained in a clean and tidy condition
• The property is not being damaged in any way
• There are no more than the number of people specified on the tenancy agreement living at the property
• No pets are housed at the property, unless otherwise agreed to

Another way to avoid disputes is by carefully reading the insurance policy’s product disclosure statement. Some policies will not provide cover if the tenancy has moved to a periodic lease. Whereas other policies may reduce claims by depreciation of fixtures and fittings.

Knowing what is in the fine print of the insurance policy and passing on to tenants what will and won’t be covered eliminates the possibility of later disputes. If the landlord is upfront about insurance coverage, then the tenants can’t argue that they weren’t properly informed.

Knowing the difference between wear and tear and accidental damage can eliminate a lot of grief in situations where a lease is about to expire or damage needs to be urgently fixed. Once both tenants and landlords work out what constitutes damage or simple wear and tear, the next step is to work out what their specific home insurance policy will cover and what it will not.

In most situations disputes over damage to a rental property can be avoided by being transparent about insurance policy coverage and making sure that both parties are keeping up with regular property maintenance. However, the biggest tip for both tenants and landlords is to understand that occasionally accidents do happen.